Values, vision and visibility: interview with Elizabeth Honer

Elizabeth Honer says that she is not a “career internal auditor”, yet as CEO of the Government Internal Audit Agency (GIAA) for five years, she became passionate about the value of the profession and the need for greater understanding and appreciation of it as a career ambition. Now, a few months after leaving the GIAA and contemplating her own next steps, she discusses the future of the function and how it can – and should – develop.

Her view of internal audit, already comprehensive from her experiences running internal audit services across most central government departments, has been further broadened by her time serving on IIA Global’s board of directors (her term finishes this summer). In her period at GIAA, she also became a member of the Chartered IIA and was a speaker at last year’s Internal Audit Conference in London.

The fact that she chose to gain Chartered IIA membership while leading a team of 500 internal auditors across 40 sites is no surprise given her history of continuous personal development. This means that she now views the future of internal audit not only through her experiences in the profession, but also in the light of her previous training as a teacher, a civil servant, a qualified CIPFA accountant and a Masters graduate of Cranfield School of Management.   

She is convinced that internal audit needs to change – fast – to seize opportunities and ensure it becomes an indispensable part of every organisation. In her speech at the Internal Audit Conference, she argued that “risk just got riskier”, pointing to the multiple challenges caused by data and cyber security, geopolitical instability, climate change and inflation, among others.

Yet management practices in many organisations are still stuck in the 1970s, she said. Internal audit is essential – but it too needs to change. “We are needed more than ever before to help management anticipate and adapt in this rapidly changing world, to be their trusted advisor bringing the independence and objectivity that makes us special. But we do need to change the way we achieve it,” she told delegates.

What does change look like?

“I joined IIA Global’s board because I’m committed to the profession and I want to make it better understood. I wanted to look at how we could raise the professional reputation of the function worldwide,” she says. “I also wanted to help transform it. We need to modernise and evolve.”

The new Global Internal Audit Standards are part of this, but Honer and her fellow board members have also been focusing on IIA Global’s Vision for 2035.

“At the moment we are gathering views from internal auditors and customers – what does everyone want from the profession and where do we focus the profession in future?” Honer explains. “I’d like members of the Chartered IIA to submit comments to the consultation, and I’d also like them to ask customers to respond. This is so important, we need as many people as possible to contribute.”

Wider changes in organisations and the workforce also have implications for internal audit. “We must be agile and adaptable, and we need to move ethics, values and culture up the agenda. These can become the ‘soft’ controls that will enable employees to be more agile when they respond to customers and organisational needs,” Honer says. “If you are confident that people understand the ethical way to work and operate to consistent values, then you can empower them to make decisions and move faster.”

Working like this, however, requires different skills and audit methods. Internal auditors need to be strategic thinkers who can put together “pieces of the jigsaw” to identify their significance to the organisation. They need to understand how to audit culture and ethics, and be able to harness diverse views to get alternative perspectives.

Real-time audits instead of “linear” audits will require the skills to communicate with managers throughout the audit process – more like consultants, Honer says. The basic cyclical audits on core controls are still essential, but plans for other types of audits must be nimble and flexible.

Artificial intelligence (AI) and technology are an essential part of these developments. Internal auditors need to consider how technology is being used by the organisation and how it is used within their own function. Culture and ethics are an important component in this area too.

“Outcomes-based” auditing

“I’ve been thinking about how we can move from risk-based auditing to the next generation of internal audit and I would love a debate with others in the profession about the concept of ‘outcomes-based’ auditing,” Honer says.  “Risk-based auditing has now been around for over 25 years. I believe it’s time to evolve, to connect our work more directly to the outcomes or objectives an organisation is trying to achieve. So instead of starting with what could go wrong, we start by articulating what the organisation, governance arrangement, control or risk mitigation is there to achieve and frame our reporting accordingly. To some extent, internal auditors are already doing this, but we can go further.”

She believes that explicitly moving the focus of audits to the outcomes will ensure that audits are focused on what really matters to managers and will create a far more positive message.

She explains: “People only feel compelled to do something better if they feel motivated. This would turn the language around so managers are no longer given a list of ‘weaknesses and failures’. Of course we mustn’t pull our punches when things are going badly wrong, but using a more encouraging and positive language – about what needs improving rather than what’s going wrong – is more likely to elicit the changes needed.”

Honer adds that her experiences at GIAA taught her that at least 60% of the success of any audit report depends on how the customer is handled. Probably only 40% depends on the process of the audit. “Getting buy-in is essential,” she adds. “It will enable auditors to move on from the way we have done audits since the 1940s and focus on opportunities. I’d love to get a debate going on this.”

She also believes that it’s vital that internal auditors come from all backgrounds and professions – and appreciate that internal audit skills increase their abilities to progress to jobs elsewhere. “I’d like to see different points of entry to the profession throughout people’s careers and greater appreciation that internal audit skills open doors to different options afterwards,” she says.

Drawn from experience

Honer describes her career in three phases. “The exploratory phase was when, after reading English at York University, I worked in arts administration and qualified as a teacher (the best people management training I ever had).

The consolidation period was when I joined the civil service and became a board member at the National Archives, before leading efficiency projects at the House of Commons. And the leadership years began after I finished my MA and became finance director of a large government department.”

The last of these was “pivotal”, she adds, because it taught her difficult lessons about authentic leadership.

As a new finance director, completing her CIPFA qualifications, she found herself struggling with a second cancer diagnosis and the death of her father, while planning her own wedding.

“I was stressed and wasn’t being the leader I wanted to be. My executive coach said ‘tell your colleagues what you’re going through’. I found that being honest helped other people to open up about their own lives and get the support they needed,” she says. “I realised that if you don’t tell people, they make up reasons for your behaviour and get it wrong. You need to admit you’re only human.”

When she was appointed CEO of the newly formed GIAA, the cross-departmental function was still consolidating. She had a vision for  what it could become and how it could achieve its purpose of gaining greater value from its overview across government.

“Under my predecessor, lots of great work had been done on the infrastructure and on bringing teams into the Agency. There was still work to do to ensure we harnessed the value the Agency could offer,” she explains. “My job was to make real the  potential of the Agency. What I’m most proud of is how we created a sense of identity and a compelling vision of what GIAA could be for employees and stakeholders.”

Early thematic projects were on values and culture and cross-governmental insights. Honer worked with the Civil Service Board to direct internal audit attention to the most pressing risks, but the situation was complicated because of the autonomous nature of government departments and their vertical hierarchy culminating in the minister. GIAA constantly needs to balance the value it provides to individual departments and the value  gained by looking across government, she says. If it only does the former then why have the Agency? If it goes too far towards the latter and starts explicitly comparing departments, then it could quickly lose trust.

“Governance in the Civil Service is very subtle,” she explains. “My job was a constant balancing act, but that’s what makes it interesting. It taught me so much, particularly during the Covid crisis when I really appreciated the value of visible leadership – you need to be out there talking to people. You need to hear from them, and they want to hear from you. People want to know what you stand for as a leader.”

Innovation was an essential part of GIAA’s development. Not only did the internal auditors have to start analysing what they were seeing across departments and learn how to share this information, but they were also looking for ways to gather and use the data.

“By the time I left we had developed three separate AI engines. We had one for risk articulation, one for drafting the first version of reports and one to gain insights from across all our audits,”Honer explains.

“People in the GIAA bought into the new vision and use of innovative methods, and I pay tribute to them all for making that vision a reality. We went up double digits on the Civil Service people engagement index in every category except pay – and we rose 24 points on clarity of purpose in just one year,” she says. “From a leadership point of view that was so important.”

This kind of improvement starts with unity and a sense of purpose, but it needs to be maintained, communicated and led from the top consistently, she adds. “We gave out awards annually for people who lived our values. The focus was not only on what you did, but also how you did it. We won awards, including Investors in People awards for our apprenticeships.”

What next?

Now that Honer has left the Civil Service, she is taking on a portfolio of roles reflecting her many interests. One strand is as a consultant and non-executive director. Another is in academia – she has recently become a visiting fellow at Cranfield School of Management. Thirdly, she is working in a voluntary capacity – she is a trustee for a newly-merged sight-loss charity Vision Foundation/Fight for Sight and an independent member of the finance and risk committee at the Royal Academy of Dance.

Given that she started in arts administration and has continued to dance throughout her career, she seems to have come full circle. “I wanted to move on while I still had some working time and energy,” she laughs. While she will continue to push for change in organisations, governance and internal audit in her new roles, she herself has no intention of standing still.

This article was published in March 2024.